The European Bank for Reconstruction and Development (EBRD) has said it delivered very strong support for the Turkish economy as investments hit a record high of 1.9 billion euros in 2015 in a written statement on Jan. 13.
The country reconfirmed its position as the top destination for EBRD finance, with Turkish projects representing 20 percent of the EBRD’s total 9.4 billion euros investment last year across some three dozen countries, according to the statement.
The rise in financing in Turkey from 1.4 billion euros in 2014 came amid two national elections, the fallout from regional crises, escalating tensions and economic growth below potential.
“The EBRD delivered a remarkable performance in Turkey despite the challenging environment, responding to an ever-growing demand for finance, especially outside large metropolitan areas,” said Jean-Patrick Marquet, Istanbul-based EBRD country director for Turkey, who took up the post in March 2015.
The EBRD financed 43 projects across a number of sectors, including the construction of the country’s biggest geothermal power plant for which the EBRD provided a $200 million loan, its largest financing in Turkey to date, according to the statement.
The institution was particularly successful in attracting additional funding for its projects from commercial banks. In Turkey it more than doubled external loan co-financing to over 700 million euros from last year’s level.
The EBRD has in particular focused on deepening Turkey’s capital markets. It became a shareholder in 12 companies, including Borsa Istanbul with a view to preparing it for a successful initial public offering (IPO). The Bank’s equity investment in Turkey rose to a record 450 million euros last year.
The Bank also joined forces with the Capital Markets Board (SPK) to promote enhanced corporate governance of companies listed on Borsa Istanbul and invested in Turkish lira-denominated bonds issued by local corporates and financial institutions, promoting longer tenor and greater transparency, according to the statement.
Developing capital markets through investment, advice and support for reforms is one of the five priorities set out in the new country strategy approved by the EBRD’s Board of Directors in 2015.
The need to boost the economy of south-eastern Turkey grew ever more urgent as the refugee crisis put a serious strain on the region, according to the statement.
“The EBRD and partners are currently looking into ways to provide affordable financing to towns that are overwhelmed by the huge influx of refugees. The EBRD aims to channel more investments into infrastructure and utilities such as water, waste and public transport, and invest in businesses that will create employment and boost the local economy for the benefit of all,” it added.
Although economic conditions are expected to remain challenging in 2016, the EBRD has begun its 25th anniversary year with a robust pipeline of projects, it said.
The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. To date, it has invested over 7 billion euros in the country through 180 projects in infrastructure, energy, agribusiness, industry and finance.